[OPE-L:4448] Re: Mandel vs. Baran-Sweezy

Michael_A._Lebowit (mlebowit@sfu.ca)
Wed, 19 Mar 1997 11:29:24 -0800 (PST)

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In message Wed, 19 Mar 1997 09:50:42 -0800 (PST),
"A.B.Trigg -Andrew Trigg" <A.B.Trigg@open.ac.uk> writes:

>
> On the issue of whether an increase in monopoly power increases surplus
> value/profits, Kalecki himself does an interesting trick with the
> departments of production. Assume that Department 1produces investment
> goods, Department 2 consumption goods for capitalists, and Department 3
> consumption goods for workers. Assume then that an increase in monopoly
> power is reflected in an increase in the markup of prices over costs in
> each department. There are two impacts:
> (a) In Departments 1 and 2 the levels of profits increase because the
> price-cost margin has increased.
> (b) In Department 3 less goods are sold to the workers in the other
> departments because the real wage has fallen. There is a reduction in
> the level of profits.
>
> The increase in profits in Depts 1 and 2 is matched by the reduction in
> profits in Department 3. There is no overall change in the level of
> profits in response to the increase in monopoly power.
>
> Am not sure where this is leading, but thought it might be a good
> concrete example to throw into the pot.
>
> Andrew Trigg
>

Andrew,
Would this not occur in Kalecki's model because the increase in the
degree of monopoly power---given the level of capitalists' expenditures---
means a reduced level of income/output/employment (which we observe in his
department 3)? Ie., instead of there being produced but unrealised surplus
value (at the higher rate of exploitation), the output level contracts to
the level at which all produced surplus value can be realised. Essentially,
this is the rational kernel in the Baran/Sweezy argument about the surplus
whose traces can be detected in unutilised capacity, etc.
mike
-----------------------
Michael A. Lebowitz
Economics Department, Simon Fraser University
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